June 25, 2014
I love coal and Kentucky bourbon. I have strong personal attachments to both. My dad and four of his brothers mined coal in Leslie and Perry County. I’ve proudly displayed Friends of Coal stickers on my cars. As for Kentucky bourbon, I make it a point to enjoy it every chance I get! Hopefully, this will establish my bona-fides for what I’m about to say:
We have in Kentucky an industry that is, in certain ways, bigger than both bourbon and coal. Yet for all the talk about saving coal and growing our bourbon industry (both wise in my book), we are totally ignoring this industry.
What is this mystery industry? Kentucky nonprofits. Consider: As of 2013, there were 12,342 Kentucky workers employed in coal mines or directly related support professions. Bourbon employs a quarter of that: just over 3,000 workers. Nonprofits? According to the Kentucky nonprofit network, more than 10 percent of the Commonwealth’s workers are employed by nonprofits. That’s nearly 200,000 workers! What of revenue? Coal brought in just over $3 billion in 2005-06. Bourbon rivals that: $2.5 billion annually according to recent stats. Kentucky’s non-profits have annual budgets in excess of $22 billion.
Admittedly, these numbers are apples and oranges. They don’t take into account payroll or the fact that much non-profit revenue is probably derived from governmental sources. My point isn’t that we should pick one over the other: when it comes to economic development in Kentucky, I’m an all the above kind of guy. The point is we have a vital industry in our non-profit sector: one that employs tens of thousands of Kentucky workers and circulates billions of dollars in Kentucky communities.
This set-up leads me to my bigger point: as economic developers, we need to be thinking more of how we can nurture and grow this economically vital industry. As big as this economic-sector is, my experience is that the companies that make it up (mostly small corporations) aren’t really on our radar. Yet these companies could greatly benefit from the services of Kentucky’s economic development community. Enterprise development, strategic networking, introduction to financial opportunities, education, worker-training, targeted efforts at leveraging our non-profits, better alignment with locals … these are only a few areas where I can see our organizations helping Kentucky non-profits.
In East Kentucky, a diligent effort to grow our non-profit economy could reap specialdividends. Since the Great Society, outsider do-gooders have flocked to these mountains. In the process, they’ve brought billions of outside money into the area and seeded several impressive non-profits. A great example is the Christian Appalachian Project. Although the organization has moved some of its offices to Lexington, it has an operating budget of approximately $27 million, most of which undoubtedly still flows into the mountains. This budget goes to helping the poor
and providing needed services. In the process, people are hired, support services are retained, and Kentucky’s economy is helped. As economic developers, we should be working to identify and grow the next CAP in Kentucky.Johnathan Gay is the Director of the Kentucky Innovation Network office at Morehead State University.
Johnathan helps Kentucky entrepreneurs grow their businesses and promotes entrepreneurship in the region. Johnathan can be reachedvia www.kyinnovation.com or by using the directory at moreheadstate.edu.